Hundreds of thousands of users tied to the collapsed crypto exchange FTX could lose access to a combined $2.5 billion in repayments due to incomplete identity verification.
As of April 2, around 392,000 FTX claimants had not initiated the Know Your Customer (KYC) verification process, according to a filing from the U.S. Bankruptcy Court in Delaware. This step is mandatory in order to receive compensation through the exchange’s ongoing bankruptcy proceedings.
Initially, users were required to start KYC verification by March 3, 2025. “Any claim listed in Schedule 1 that did not begin the KYC submission by 4:00 p.m. ET on March 3, 2025, will be fully invalidated,” the court document states.
However, the deadline has now been extended to June 1, 2025, offering affected users one more chance to complete the process. Failure to do so could result in their claims being permanently removed.
Court filings show that claims below $50,000 make up approximately $655 million of the total at risk, while larger claims account for about $1.9 billion—putting over $2.5 billion in potential repayments in jeopardy.
The next wave of creditor distributions is scheduled for May 30, 2025, when FTX plans to release over $11 billion to creditors with claims above $50,000. Under the proposed recovery plan, 98% of eligible claimants are expected to receive at least 118% of their original claim amount in cash.
How to Complete the KYC Process
A number of users have faced technical issues when trying to finish their KYC applications. However, according to a post on X from Sunil, a member of the FTX Customer Ad-Hoc Committee, those who missed the initial deadline can still restart the process.
Impacted individuals are advised to contact FTX support at [email protected] to get a ticket number. Then, they should log into the support portal, create an account, and re-upload the required documents for identity verification.
In February, FTX’s Bahamian entity, FTX Digital Markets, successfully carried out the first round of distributions, delivering $1.2 billion to creditors.
FTX’s downfall triggered a wave of bankruptcies across more than 130 affiliated entities and contributed to one of the harshest bear markets in crypto history, with Bitcoin dropping to around $16,000.
Though these repayments may not directly impact the market in the short term, Bitget Wallet COO Alvin Kan said the return of funds could restore confidence and possibly drive some capital back into crypto.
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